Readers' comments

A couple of things missed here:
- small one, Unilever is much stronger than P&G in sub-Saharan Africa;
- Unilever's food business is larger than their Home and Personal care divisions combined. In developing markets particularly, the distribution channels are essentially the same for all these fmcg products so this gives them critical leverage versus P&G. It's a bit astonishing this wasn't referenced in the article even though Knorr and Lipton, two of their food mega-brands, do get mentioned. In ssAfrica for example, Unilever companies would generally view Nestle as the primary competitor rather then P&G.

Ossama Bin Ladin popped up on world televison screens with a long scraggly beard and threatened the world destruction and Apocalypse.
He claimed long beards like Muhummed are the badge of faith of true Muslims.
Fear the Beard.

And airline security officers took note: Long beards were a sign of hardore religous fanatics and potential terrorists. And long beards got 'Special Attention" from Homeland Security. Even Santa Claus would get the body cavity search.

And young men decided the Clean Shaven Look was preferable. And they didn't want their stuff messed with.

International travelers are blade runners: Smooth shaven, western suits, laptop, and wingtips--less hassle.

And blade factories went into a decade long boom.
New high tech double, triple and quadruple blades for even closer, smoother shaves.

Rub your chin: It is the Law of Unintended Consequence.
.... Or a conspiracy with Al Qaeda with Burma Shave.

On the other hand, the great losers from 9/11 (in commercial terms, of course) were manufacturers of swiss-knives and lighters...

Of course, the "'24' Series", with Jack Bauer and all his crew, exceeded the desired effect: a "friend of a friend" of mine was retained 36 hours in CBP at Dallas Int'l Airport, for being brown-coloured skin, having an arabic name (ie. Omar, Ahmed, Jamil, etc.), and holding a Mexican passport (civilian use, of course). If he wasn't clean shaved, he would've been held for another 20 hours!!... For the case, it's a load-off to be 'caucasian' and possessing a 'typical' romano-germanic background, belonging to the higher-middle class that can afford tourist or study trips, and having an updated Visa as well... Anyway, I don't get my arse saved from being Mexican!! ;)

Hindustan lever is not a real innovator. In all major cases they just copied it from a small competitor and then used their money power. be it sachet shampoo (innovator was velvet) or cheap detergents (Nirma)

P&G efforts to centralize all decision making process and leave little authority to local offices start to show how inefficient this move was.. when I joined the company it was the best marketing school available in the country, when I left it, it was turning into a giant bureaucracy with no bias for action / results

P&G has to find the right balance between centralized, integrated operations and bottoms up innovation. Too often, scale around the world supersedes customization for developing countries. Too many people have the ability to 'advise' and say 'NO'. Once P&G cuts this flab, it can empower Brand managers to do what they are best at - making things happen!

Unilever has a winning strategy picking the low hanging fruit products and reverse engineering their products to meet price and function needs of Indian consumers. Unlike P&G, Unilever isn't trying to change purchase behaviors too soon. The risk, however, is that Unilever's success in this market could change behavior over time and open the market for P&G to come in and dominate. It's kind of like what happened with Fage and Chobani in America.

Fage made the market for Greek yogurt in America. They invested heavilg in distribution once they saw the trend emerging, and dominated the market. Once behaviors had changed so much that there was a huge market for Greek yogurt, Chobani came in with a product that was cheaper, had more flavors, had better packaging design (fruit on bottom) and to many people it tasted better. Chobani was so successful at capitalizing on the market Fage had opened up that they are now not only the #1 Greek yogurt brand, but also the #1 yogurt brand of all types of yogurt. Now other brands like Yoplait and Dannon are trying to introduce their own Greek yogurts with less success.

The interesting difference here for me is that two new entrants dominated the market, and the traditional brands are struggling. Fage didn't think they needed to innovate to maintain market leadership, or at least didn't do it fast enough. Chobani understood consumer needs and got many to switch to their brand. P&G isn't being innovative enough in India, but could gain more market share once Unilever has used customer-centric insights to innovate their offering. P&G will probably have to reemerge by renaming an existing brand, creating a new one, or acquiring a local competitor and innovating/ adding to their products.

Unilever’s plan to incorporate 500,000 small farmers in developing countries into its global supply chain may ultimately give it a more secure source of high-quality produce, but making this shift is hardly without risk.

The *Cheap* coffee comes from dozens of producers, in different countries, (most laden with pesticides) all mixed together to form a homogenous product called 'coffee', this is true. However, *Quality* coffee is sourced from a single location, the better brands even list the particular farm, and the consumer is assured the farmer was properly compensated (fine chocolate is going the same way). It is no coincidence that it has taken many years for countries such as Ethiopia to win the right to brand their coffee - thus increasing its value. Global corporations such as Starbucks fought them (the small farmer) every step of the way. I was good friends with a guy in Kenya who managed nescafe in Kenya, and he knew better to avoid the cheap stuff.

I'd much rather roll the dice on the quality I get from an small group of humans working their own land than the sure thing of flavorless, homogenized, waterlogged, anitbiotic stuffed meat and produce that comes rolling off the ConAgra, Sysco and Monsanto lines.
Go to the grocery store and buy a thing of blueberries or strawberries or what have you, then go into the woods and find a wild bush. See if you can detect any flavor at all in the store-bought ones after you've had the actual fruit from nature.

You are making blanket statements without substantiating them. The Ethiopian small farmers have been growing coffee longer than anyone else, so how exactly are they failing in terms of quality? I would think that their coffee is more likely to be authentic, not to mention organic since they cannot afford much in the way of chemical sprays, etc. If it doesn't taste like the coffee we're used to, then perhaps our blending and refinement methods are the issue.

I've been to Ethiopia several times and drunk their coffee (usually prepared as espresso these days), and it has a kick like nothing else you will ever drink.

I don't like what industrial farming has done to bananas either. The Dole banana has been selectively bred to be large, yellow and longer lasting (for shipping), but for flavour it can't match the sweet, smaller varieties. Thankfully they are still produced all over East Africa, though they cost more.

First of all, how did this become a discussion about Ethiopian coffee growers? We were/are discussing multiple developing countries, to include 500,000 growers.

I didn’t question Ethiopian coffee growers in particular. I questioned the broad Unilever number of 500,000 growers from multiple developing countries. I would like to know how Unilever will control uniformity far and wide and take on the associated risks.

Some of those risks include establishing, maintaining and verifying on a regular basis, the level of quality of 500,000 small farmers across developing countries, not just Ethiopia.

Growing and cultivating food across multiple countries will have some differences. Even CocaCola does not taste the same in all countries, and they claim to use the same formula across the board.

Will the Unilever standard for “High-quality” coffee beans be set at a level that will allow the 500,000 growers to be in compliance?

I raised the topic of coffee just as an example of how food giants work with networks of very small farmers - some with only one acre of land. This system has worked for a century, so when you came on and seemed to doubt it was real, you exposed yourself to some criticism. Sorry, but it pays to do some research before posting here.

As for Coke, the variations in taste are due mainly to the sugar, which is sourced locally, and sometimes the water. I've had a few strange-tasting Cokes around the world. Coke is a bit more complicated than the coffee example since it is a ready-to-consume product sold in many different formats. It combines imported syrup with local sugar and water, and refining, bottling, storage and transportation issues can all have undesired effects.

Unilever, of all companies, would have the experience to regularize the look and taste of a crop input.

Thank you for your "expert" opinion, however, you drifted away from my original question.

My original question (next graph) is still open. Your claim about Ethiopian farmers growing coffee longer than anyone else does not address the question. Also your response about bananas does not lend itself to answering my question, so please, refrain from instructing another reader about doing research before posting, you come across as some kind of editorial police authority. I made my inquiry based directly on the article, thank you.

Specifically, How will a supply chain absorb 500,000 additional entries and maintain, as the piece said, “A secure source of high quality produce” from each of the 500,000 entries and take on the associated risks.

Supply chain compliance is a tricky thing when it involves 500,000 entries circulating from many different geographic locations far and wide. Not an easy tasks for Unilever, Nestle, Kraft or P&G.

By the way, exactly what does “high-quality” mean in Unilever’s commercial gameplan? I don’t recall that being explained in the origin piece.

No need in you trying to answer the questions above, they are probably best suited for the Economist to follow up and ask (the source) Unilever to explain.

Here is a more interesting question for all the coffee experts out there.

Approximately how many beans does it take to make a cup of expresso?
25
50
100
125

You mean "espresso"? It would mostly depend on the bean size.
I am pro-small farmer as is probably obvious from my posts, I am pro-fair trade. Your original question seemed rhetorical, and framed in such a way as to question the ability of small farmers. I am not sure what exact issues you have with the practices of these people - is it cleanliness or what? Not that it would matter with a product that is roasted over a fire.
In Ethiopia at least, flavour consistency can't be a big issue, since although there are millions of farmers there, they still mostly use the original arabica coffee strain, which originated in the area straddling western Ethiopia and southern Sudan. (The Borlaug Institute believes there are still wild arabica bushes in the Boma plateau of South Sudan and is trying to collect samples for genetic warehousing.)
Other things being equal, I doubt my taste buds would notice whether my cup of coffee came from a million small farms or a few big ones. But the social consequences are hugely different. One of the major threats to Ethiopia's stability today is the ongoing evictions of small farmers to clear land for large, foreign-controlled producers. The guilt feelings about that would definitely contaminate my morning coffee.

My original question was not, as you say, "Rhetorical, and framed in such a way as to question the ability of small farmers." Not even close.

My inquiry had nothing to do with the "cleanliness" of a farmer and/or their cultivation, harvesting procedures and practices. Such issues, for example, Leaf Rust and Berry disease might be of concern to Unilever as they attempt to insert 500,000 global sources into their supply chain.

I questioned Unilever's plan to incorporate 500,000 small farm global sources. Obviously no answer has been presented in the article, perhaps for at least two reasons, one, obvious confidential corporate strategy and two, there probably is no easy explanation/answer.

Since you are pro small farmer, fair trade advocate, it seems you might be curious about Unilever's claims and intentions. Keep in mind, they support GM technology, and if they are required to get 500,000 farmers up to their "High-quality" commercial level, why would they not go that way?

I don’t see small farmers having enough leverage to rewrite the rules for retail trade transactions.

I am afraid I have just lost the thread of your argument. I have no problem in reading comprehension. Your initial post cast serious doubt on the diffused sourcing system which has been successfully practiced for centuries for tea, coffee, cocoa, etc. Why do you find it so hard to believe that a company with Unilever's experience can manage 500,000 suppliers?

I am not making a case for or against GM here, since that wasn't an issue mentioned earlier.

One of the most telling bits in this article is 30,000 applicants for 100 jobs. This is amazing but even more telling; only 80 were considered good enough to hire. That's about on competent grad out of about seven university classroom.

This is the story of the Chinese education industry. Numbers driven, the goal is to turn out as many grads possible, no one fails, and no worry about marketable skills. For sure all have endured tedious political classes to remove critical thinking and innovation in China's harmonious business society.

Every decade or so, we reach a moment where the perennial bumbling hybrid Unilever seems to look, briefly, more promising than Procter, the Worlds' perennial best run company. Wags talk about P&G's arrogance, Unilever is delighted to explain their momentary success and then it all goes back to business as usual, continued P&G dominance.

P&G is a great company, but their very organization structure is diving their fall. Agility is lost, people are process driven and MDO marketers don't have any P&L visibility. You can't be a brand manager without P&l visiblity. Push for scale at cost of complexity and muddled KPIs has resulted in P&Gers playing the Blame Game.
World has changed as consumption is now shifting to developing markets. And no one needs a magical detergent for their clothes - they need something that works. Playing the 2X or 3X game at premium price point doesn't work any more as price-sensitive consumers are now over-developed.
Hence, the faster and value player wins.

Get real.
Unlike US/EU, Indian/Chinese regime does NOT want their citizens to prosper.

1,347,350,000 Chinese have ONLY $2 per head worth cash/coins in circulation.
1,210,193,422 Indians have ONLY $5 per head worth of cash/coins in circulation.

127,610,000 Japanese have $564,219 per head worth of cash/coins in circulation.
313,802,000 Americans have $3534 per head worth of cash/coins in circulation.
501,259,840 Europeans have $1400 per head worth of cash/coins in circulation.
143,100,000 Russians have $27 per head worth of cash/coins in circulation.
62,262,000 British have $819 per head worth of cash/coins in circulation.